Too many workers are left reliant on meagre statutory sick pay, or receive nothing at all. And the government’s attempt to provide a short-term fix, the self-isolation support payment scheme, is failing. Barely anyone’s heard of it, and most of those who do apply to it don’t get any help.
We need decent sick pay for all now. This means moving away from the temporary short-term fixes the government prefers, and instead doing what should’ve been done last March: increasing existing Statutory Sick Pay (SSP) to a real living wage and making it available to all by scrapping the lower-earnings limit.
The problem with sick pay
Going into the pandemic, the UK’s sick pay system was both ungenerous and failing to reach everyone. While employers can choose to provide occupational sick pay (usually at full pay), they’re not required to. Around a quarter of workers instead receive SSP. This is just £95.85 a week, the least generous mandatory paid sick leave of any OECD country, and is only available to employees who earn £120 per week or more. 8 per cent of workers get nothing at all when off sick.
This terrible sick pay system hits some workers harder than others. A new TUC survey, a nationally representative survey of 2,134 workers carried out by BritainThinks in May 2021, finds that:
What’s the self-isolation support payment scheme?
The self-isolation support payment scheme, also known as the Test and Trace Support Payment Scheme, was introduced in late September 2020. Initially planned to last until January, it was a short-term fix to the terrible sick pay system to last only during the pandemic.
The scheme is intending to provide a £500 payment to workers on low incomes who have been required to self-isolate due to Covid-19. To be eligible, workers must be unable to work from home and will lose income due to self-isolating.
The scheme is split in two:
Councils were given £50 million to set up, run and advertise the new scheme at short notice. This funding was split between the two schemes: £25 million for the main scheme, £15 million for the discretionary scheme, and £10 million for the set up and administration.
This funding covered the period until the end of January 2021. Councils were told that any overspend on the main scheme would be covered by government, but that funding for the discretionary scheme was fixed and limited.
Councils therefore had the freedom to set their own criteria for the discretionary scheme, but they also knew funding had to last for over three months. If it ran out, there’d be no more. This promoted caution when setting the criteria, with fears that a spike in local cases could close the scheme.
What’s the problem with it?
The scheme has two main problems: no one’s heard of it and it’s not getting money to everyone who needs it.
For a sick pay system to be a success, people need to know about it. Our recent survey found that only one-in-five workers (21 per cent) even know about the scheme. Awareness drops even further among groups who most need the support: low-paid workers (16 per cent), those in insecure work (18 per cent), and those who receive no sick pay (16 per cent).
Secondly, for those who have heard of it, the scheme isn’t working. In January 2021, the TUC sent freedom of information (FOI) requests to every English council to find out how it was going. What we found was evidence of a failing system. Only 30 per cent of applications had resulted in a payment, meaning the majority of applicants got nothing. For the discretionary scheme, just 1 in 5 applications had been successful. The broad national figures masked a postcode lottery, with success rates for the discretionary scheme as low as 1 per cent in some areas.
We also got told about a funding crisis for the discretionary element of the scheme. 235 councils provided details of their discretionary funding. A quarter of these (26%) had run out, or were close to running out, of money. This left some councils having to plug the funding gap themselves, or forced to temporarily close the scheme.
What’s happened since?
In January 2021, the scheme was extended until the end of March, with £20 million of extra funding announced. In February, as part of its roadmap out of lockdown, the government further extended the scheme until a vague ‘summer’ deadline.
With this extension, funding for the discretionary scheme was upped to £20 million per month, and the scheme was expanded to cover parents who are unable to work because they’re caring for a child who is self-isolating.
These extensions, expansions and new funding are welcomed. However, the problem is that they’re tinkering with a failing system. In May, the TUC again sent FOI requests to councils to see how the scheme was going since the changes. The extra funding and expansion have barely shifted the rejection rate and the majority of applicants to the scheme are still rejected.
Based on responses from 94 councils, almost two-thirds of applications (64 per cent) have been rejected since the scheme was expanded and extra funding was announced. And the postcode lottery remains in place. Rejection rates vary from 19 per cent in some areas to 98 per cent in others.
The increased funding was undeniably needed. We asked whether councils had run out of discretionary funding at any point since the scheme was introduced. A quarter (24 per cent) of the 112 councils who responded to us about this said they had.
What we need next
For a good sick pay system to work, especially during a pandemic, workers must feel confident that they won’t lose out financially when they first develop symptoms. Our current sick pay system fails to provide this confidence.
Those who receive SSP, or even less, are left with the choice between going into work when sick or facing financial hardship. And those in insecure work worry about the consequences of taking time off while sick. These concerns are also likely affect whether people get tested - workers who will lose out if they take time off sick may be wary.
The self-isolation payment support scheme was introduced to fix this, but it’s failing to do so. Most workers haven’t even heard of it. And those who have and choose to apply face an application process where two-thirds are rejected. This is the result of the government opting for cobbling together a late and initially under-funded short-term fix.
Instead, it should’ve done what’s clearly needed: raise existing SSP to the equivalent of a real living wage and make it available for all. Our findings on insecure work also emphasise how vital it is that the government finally takes serious action on tackling this issue.
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